Wednesday, March 31, 2010

Barrick Gold (NYSE: ABX) and Goldcorp (NYSE:GG) Up

Barrick Gold and Goldcorp

Two of the largest gold mining companies in the world, Barrick Gold (NYSE: ABX) and Goldcorp (NYSE:GG), are up today as investors again look for safety and stability as a job report revealed another 23,000 cuts were made by American companies.

Gold has shot up also in response to that and other news, as pent-up concerns may start to help it break out of its tight $1,100 range, which the Greece sovereign debt crisis held it to in the first quarter.

After today, gold will have risen in price for the sixth straight quarter, and I think could move up significantly in the next quarter, although as usual, much of that depends on geopolitical and economic events we aren't yet aware of or could happen.

But under the conditions we're at economically and in relationship to paper currencies, gold is looking good barring another potential collapse of one of the countries in the European Union.

Citigroup's (NYSE) World Government Bond Index and Mexican Securities

Citigroup World Government Bond Index

The market liked the news from Citigroup (NYSE) that Mexican securities will be eligible for inclusion in its World Government Bond Index, resulting in the Mexican peso rising to a 17-month-high.

The Mexican peso has been the top-performing currency of the 16 highest-traded currencies in the world in 2010, and could strengthen more as the inclusion on Citigroup's World Government Bond Index attracts the attention of foreign investors.

Citigroup said Mexico will be added to the World Government Bond Index once the requirements to enter the Index are met for three months in a row, which includes in relationship to Mexican bonds - barriers to entry, size and credit.

At this time Mexico meets all the requirements and is expect to have no problem peforming in that capacity for three months in a row. Mexican debt could enter the Index as early as October 2010. Mexico will be the first Latin American country to be added to Citigroup's World Government Bond Index.

VALE S.A. (NYSE: VALE) Iron Ore Deals

VALE S.A. Earnings to Soar

VALE S.A. (NYSE: VALE) is the top iron ore mining company in the world, and the deals they just made with Posco of Korea and Nippon Steel and Sumitomo Metal Industries of Japan, position for solid earnings in the quarter, and probably for all of 2010.

The recent agreement, which will price iron ore on a quarterly basis, increases the iron ore price by 90 percent, while the cost of doing business will be close to the usual, making it a good deal for the earnings of Vale and other iron ore producers.

Per the new contract, prices will be between $100-110 a metric ton, whereas the current price stands close to $62 a metric ton.

It is expected that China will follow in the footsteps of their counterparts, although they feel that they should get a better price because they buy more iron ore.

Even if they do get a better price, it shouldn't be far off from the deal made with the Koreans and Japanese.

Many analysts expect Vale to end the year with a share price of $40 as a result of the changing market price mechanism.

Market Vectors Nuclear Energy ETF (NYSE:NLR) - Great Uranium Play

Market Vectors Nuclear Energy ETF

We continue to talk at Commodity Surge on the uranium industry, which is sure to explode in the years ahead, based on the over 200 new nuclear plants in various stages of planning or construction around the world. Market Vectors Nuclear Energy ETF (NYSE:NLR) is a great way to play uranium, and it has other benefits as well.

For example, the nuclear ETF is also a way to participate in emerging markets, as the vast majority of the nuclear plants will be built in those countries.

Even with attempts to increase production, the uranium mines in the world won't be able to supple the growing demand for uranium any time soon, and that ensures prices will eventually start to rise again as a consequence.

In the middle of 2007 uranium spot prices had reached as high as $136 a pound, but plunged along with everything else during the height of the economic crisis, to about $45 a pound today.

I don't see a much simpler and better way to invest in uranium unless you absolutely have the time to delve into every part of the industry. The other great things is low fees of an ETF and not having to deal with the prospect of trading in foreign markets. This applies to Market Vectors Nuclear Energy ETF because most of its holdings are tracked on foreign exchanges.

Any downside here? Sure. Like almost every investment today, much depends on the time a real and sustainable economic recovery arrives, and whether or not, or how long it takes, to enter another recession.

This is important because of the spending aspect of the sector, which would be cut back in a big way if things go sour economically again.

Even so, I look at this as a long-term play, and even if things go bad, I think nuclear commitment from countries around the world is here to stay. It's not a matter of if uranium prices will go up, it's only a matter of when.

Market Vectors Nuclear Energy ETF

Citigroup (NYSE:C), J.P. Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) Ready to Explode in Growth says Dick Bove

Banking stocks could rise to 4 times what they are today

According to Rochdale Securities analyst Dick Bove, the shares in companies like Citigroup (NYSE:C), J.P. Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) could explode in value as high as 4 times what they are today in the next few years.

This is a little different from a recent report that said Bove asserted the time-frame would be in the next two years.

Bove maintains the banking stocks have the potential to go that high, but covered himself saying, that could change if there "is a breakdown in either the economy or the financial system.”

In other words, this assumes everything goes right with little in the way of economic bumps along the way.

While I agree the banking stocks will eventually rise in a significant way in the future, the current economic situation is still so uncertain, that making these types of predictions, while interesting, and could come about under the best of circumstances, are still more about marketing the names of analysts like Bove than anything based on proven fundamentals of the companies or the economy, as far as the real condition they're all in.

Citigroup (NYSE:C) Hires More Traders

Citigroup adds people to hedge fund business

Citigroup (NYSE:C) has hired 13 more traders in its hedge fund business in order to strengthen and expand its "product and service offerings and [its] international footprint.”

The new recruits are specialists in trading and risk management and come mainly from competitors Morgan Stanley (NYSE:MS) and Barclays Capital, and have a lot of experience in their fields.

Looking to increase their No. 3 ranking in the specialized investment sector via their Global Prime Finance Group, which includes settlement, custody and financing services.

Bank of America (NYSE:BAC): Oil at $90 a Barrel

Will oil reach $90 a barrel in 2010?

Bank of America (NYSE:BAC) say they see oil reaching as high as $90 a barrel before the end of 2010, although others believe prices will stay close to where they're at today for the remainder of the year.

Of course most of this is all speculation, as we need to wait to see whether Americans loosen up their wallets in the summer months and travel more, or decide to stay closer to home. Much will depend on that as to the demand oil will have.

Some reasons cited for prices remaining lower is the large global supply and probable lower demand will keep prices in check.

It's possible prices could even fall in the summer months, again, depending on the traveling habits of consumers.

Bank of America (NYSE:BAC) Sees Copper Rising

Copper Prices Going Up

Bank of America (NYSE:BAC) says copper prices should continue to rise in the second quarter, even in light of the metal reaching a 19-month high on Tuesday.

Price rose as high as $3.57 a pound before finishing the session at $3.56 a pound, a gain of 3 cents.

Bank of America said their reasoning behind their projection is the rising demand in China, and to a lesser extent the United States, while copper production remains down some.

Most of the recent gains have come from primarily China copper demand continuing to grow.

Teck Resources (TSE:TCK-B) Bonds Investment Grade Again?

Teck Resources Bonds Investment Grade?

Although Teck Resources (TSE:TCK-B) hasn't officially been designated as having an investment-grade bond rating, the market has already spoken to the issue, and in the view of the market Tech has already reached that stage.

Moody's did increase the credit rating of Tech to Ba1 in the early part of March, one level below investment grade.

When compared to the corporate bond market in the U.S. at the investment-grade level, Teck does well, with their five-year, 9.75 notes falling to 4.51 percent from 11.2 percent since May 5, while their American counterparts dropped to 4.58 percent.

Moody's said the reason they upgraded Tech Resources credit was the significant reduction in debt and sellling of assets.

Teck Resources Bonds Investment Grade

India Likes Vale (NYSE:VALE), BHP Billiton (ASE:BHP) and Rio Tinto (ASE:RIO) Quarterly Contracts

India Companies Support Iron Ore Quarterly Contracts

Indian companies such as Sesa Goa and NMDC like what they see with the change in iron ore contracts with Vale (NYSE:VALE), BHP Billiton (ASE:BHP) and Rio Tinto (ASE:RIO), from an annual to a quarterly basis, and so do investors, as shares in the companies rose with the news this is going to be the new way of doing business with iron ore contracts and pricing, reflecting a more accurate measure of the market than the annual pricing couldn't do.

Exporters like this because it decreases the difference in price between spot and contract prices, and allows them to participate in profits depending on the movement of prices.

Annual contracts interfered with that and forced companies to operate within the parameters of the agreed upon price, no matter how it impacted their margins and earnings.

EU Attacking Vale (NYSE:VALE), BHP Billiton (ASE:BHP) and Rio Tinto (ASE:RIO)?

Lobbyists in Europe are pressing the European Union to interfere in the free market practices of Vale (VALE), BHP Billiton (BHP) and Rio Tinto (RTP) by not allowing them price iron ore at market levels.

The two lobbyist organizations represent the steel industry and engineers in the region, and are identified as Eurofer and Orgalime.

Using the typical socialist and liberal line concerning the fairy tale idea of "fair prices" or in this case specifically "fair access" to iron ore at competitive prices, they are citing the bogus idea it would interfere with a sustainable economic recovery around the world.

Of course these clueless organizations claim the price increases aren't related to demand, that's an outright fabrication, as countries and companies are responding to the price increases by making deals to buy the iron ore.

Socialist Europe has to change from socialism to capitalism if they want to compete on the global level. Whining about the inability to do so does nothing to change it.

Start working hard and being innovative rather than admit through your actions you aren't as good as your competitors.

Tuesday, March 30, 2010

Koch Industries Battles Climate-cooling Deniers

Koch Industries Heroic Battle Against Climate Cooling Deniers

Koch Industries has been quietly battling the climate-cooling deniers who continue to assert the earth is getting warmer when all data prove it has been cooling for well over a decade.

Koch Industries has helped fund organizations which are exposing the huge fraud and hoax of climate change, and the faulty "science" behind it.

This is being made to look bad by climate-cooling deniers like Greenpeace, who attempt to smear Koch industries because the are in the oil business.

Sure Koch Industries has a vested interest in the outcome of this battle, but they rightly support groups that have far more evidence on their side, especially after the disgrace of climategate which revealed the evidence of global warming has been largely contrived and based on nothing provable.

Keep up the good work Koch industries, this is a battle that shouldn't even be happening, as there is no evidence of climate change whatsoever, other than the minds of those that have a wet dream of contolling the world through a socialist lense.

Wheat Futures Rise on Short Covering

Wheat Futures Prices

Although wheat futures prices will remain under downward pressure, they did get some respite today as short-covering gave it a nice jump today, even after the spot contract plunged to an almost 6-month low.

The May wheat contract was ahead by 5 1/2 cents at $4.70 1/4 a bushel by 12:10 p.m., after falling to $4.62 1/4, a contract low and the lowest spot wheat price since October.

Price competition and a burgeoning global wheat supply has kept the price of wheat down for some time, and things don't look like they're going to change any time soon.

Wheat Futures Prices

Alcoa (NYSE:AA) Profits Vulnerable

Alcoa Profits in 2010

Even though there are some positive signs a global economic recovery may be on its way (forget the media assertions), Alcoa (NYSE:AA) is vulnerable to aluminum prices falling, which would make their profit picture look pretty weak.

This doesn't mean aluminum prices will fall this year, as it seems there is enough demand support out there, but the economies around the world are still very tenuous and weak, and downward pressures on aluminum prices could be a factor in 2010 for Alcoa and other aluminum suppliers, and that has to be watched closely by investors.

We all know China and India are undergoing fast changes, and their demand for aluminum should continue for some time, but that's not the same type of surety related to the steel industry, where iron ore and coking coal are pretty much assured to be strong in demand for 2010 and beyond.

Long term aluminum looks good, and so Alcoa should participate in that success, but short-term, everything is up in the air for any company, and there is still enough uncertainty out there to remain cautious about Alcoa and aluminum.

Natural Gas Prices Rise on Economic Recovery Hopes

With natural gas plunging to lows over the last several months, there are thoughts it could start to rise again based on hopes there will ultimately be a sustainable recovery, although that's far from being a reality at this time.

So far in 2010 natural gas prices have fallen by 29 percent.

Natural gas prices have a good chance of rising this week as those speculating on short positions exit them.

Also the fact that everything has been working for shorts makes this a possibility that prices will rise just as a temporary corrective or on any economic news which offers some hope.

At about 1p.m. today prices for natural gas had increased by 3.8 cents to $3.954 a million British thermal units.

Treasury Stake in Citigroup (NYSE:C) Being Sold by Morgan Stanley

Morgan Stanley Chosen to Sell Shares of Citigroup Held by Treasury Department

Yesterday the Treasury Department announced they will be selling their stake in Citigroup (NYSE:C) with the help of Morgan Stanley, rejecting an offer from Goldman Sachs (NYSE:GS) which offered to take care of the details for almost nothing.

In what I consider an odd concern from government officials, it was implied they didn't want to use Goldman Sachs in the deal because of the negative publicity surrounding them during the financial crisis.

My problem with that is the government should be doing things the right way (I know, I know), and to think in terms of public relations rather than efficiency and low expense is idiotic and irresponsible, but then we're talking about the government.

A spokeswoman for the Treasury said terms of the deal with Morgan Stanley will be released some time in the next two days.

The government plans to sell the common shares they hold in Citigroup at intervals rather than all at once.

MAG Silver (AMEX:MVG) Prime for Takeover?

MAG Silver a takeover target?

With MAG Silver (AMEX:MVG) almost doubling its share price over the last 12 months, and a plethora of high-quality properties under its control, you wonder if some larger companies are again thinking it may be the right time to swoop in and acquire them before their share price really shoots up and they become extremely expensive to own.

Their market cap is only a little over $357 million as of this writing, so would be very desirable, even with their price close to double what it was last March.

I think any company that does their homework would find MAG Silver an extraordinary buy, but the existing economic climate still makes any long-term acquisition somewhat risky for all but the mining companies with the deepest pockets.

While it's somewhat doubtful, MAG Silver could be left on its own, in which case they should do well over the next decade or so, and probably further. If not, they would still be a great acquisition for the right company.

MAG Silver a takeover target?

Rio Tinto (ASE:RIO) Under China's Thumb?

How long did Rio Tinto know employees were guilty?

After a long period of time of making it look like China had trumped up the charges against the four Rio Tinto (ASE:RIO) employees, it looks like Rio Tinto knew they were guilty of the charges as long as six months ago.

Some may have wondered why Rio Tinto and Australia backed away from pursuing the matter so strongly, and I think if this is true, and it seems it is, this is the underlying reason.

What's somewhat ugly about this is Rio continued to allow the farce to play out on the global scene while knowing for some time their employees had indeed engaged in the actions they were accused of, according to the Independent (UK).

Many reports in the media, especially over the last several days have placed China in a negative light over the event, assuming the four accused were innocent, and the move by China one of retaliation for a failed business deal.

If this is all true, than it is a poor reflection on the type of company Rio Tinto is to allow this to play out for so long without bringing out the truth, and allowing China's name to be dragged through the mud.

There are of course problems in China, but we need to focus on real ones, not ones made up by the media based on a company that lost control of its people and failed to have internal controls in place to siphon out these types of actions before they get too far along.

In other words, it's Rio that seems to be incompetent in this matter, and their reputation is the one that should take a big hit for allowing it to continue on.

So is Rio Tinto under China's thumb now? Absolutely, in the sense Rio was caught in a circumstance which makes them look bad and operationally and ethically inept. That could be a competitive advantage to China, and may be the reason a number of deals have been struck between Australia and other Chinese mining companies recently.

BHP Billiton (ASE:BHP) Migrates to Short-term Iron Ore Contracts

BHP Billiton Quarterly now using iron ore sales contracts

It was no surprise to hear that BHP Billiton (ASE:BHP) has moved most of its Asian customers to short-term contract for its iron ore from the previous annual contract, which they have been fighting to move away from for years.

A BHP spokeswoman said about the actions, "We will have different pricing solutions in place for different customers. Pricing will be determined by the landed market price in China."

The actual price of the contracts wasn't revealed, as the legalities of contract confidentiality were cited.

Asian steel mills in particular have resisted these changes, as they preferred the stability included with the annual contracts previously used. But they will probably change their minds once they get used to the idea and prices reflect the current market conditions more accurately.

Ivanhoe Mines (TSE:IVN) Production Goal at Kazakhstan Mine

Ivanhoe Mines Kyzyl Gold Project

Ivanhoe Mines (TSE:IVN) says it has a goal to begin production on its Kyzyl gold project, located in Kazakhstan, by 2013. Ivanhoe has a 50 percent stake in the project.

The holding company is named Altynalmas Gold, which Ivanhoe has a 50 percent stake in, along with its privately-held partner from the country.

With construction scheduled to begin in 2011, Ivanhoe has been seeking investment partners to prepare to move forward with its production efforts.

Ivanhoe recently raised $232.76 million issuing shares to Australian mining giant Rio Tinto for other projects.

Teck Resources (TSE:TCK.B) Surges on Steel Demand

Teck Resources looks good on steel demand

Demand for steel continues to explode from China and emerging markets, driving up the prices of iron ore and coking coal, while companies like Teck Resources (TSE:TCK.B), which provide the raw materials needed for steel production, go up with the prices.

Add to that an estimated increase in production in steel industries residing in G7 countries, and you have a huge market about to explode for some time to come.

Iron ore and coking coal are key ingredients in the production of steel, the reason they're moving up in price along with the demand for steel.

Consequently, companies like Tech Resources are able to command top prices for their raw materials as countries and companies battle to be sure they get what they need for production.

Tech Resources will increase contract prices for its top-grade coking coal from $128 a ton to $200 a ton for the quarter beginning in April and ending in June. When you consider they make a nice profit at the $128 level, you can see how good it should be going forward, barring any unforeseen geopolitical problems or slowing down in the economies of the countries generating the demand.

Vale (NYSE:VALE), Nippon Iron Ore Agreement

Vale, Nippon Steel Iron Ore Deal

Vale (NYSE:VALE) and Nippon Steel have entered into a tentative quarterly agreement which would increase the price of iron ore by 90 percent, bringing the price to $105 a ton.

This is the first move by Vale into the quarterly pricing market, which originally they had opposed; this is significant because they're the largest producer of iron ore in the world.

The price is in line with market expectations of between $100 to $105 a ton.

A price increase like this would be a good result for Vale and other major iron ore producers, as it would generate a nice increase in revenues and earnings.

The deal is tentative because the two sides haven't come to complete agreement on the overall deal. Whatever the price ends up being, it will be applied retroactively, staring April 1.

Exxon Mobil (NYSE:XOM) and Natural Gas

Exxon Mobil ties future growth to natural gas

Exxon Mobil (NYSE:XOM) in acquiring XTO Energy Inc. has positioned themselves far a strong future with the natural gas play they got with XTO.

With natural gas prices as low as they are, there's no doubt it'll begin to rise again in price again, and when it does, Exxon Mobil will rise in value with those prices.

Exxon has one of the largest stakes in natural gas now, and their future fortune is tied into it in a big way, and even if the sector was to grow conservatively and moderately, long term this should be a great stock to own.

Monday, March 29, 2010

Alcoa (NYSE:AA) Up as Metals Rebound

Alcoa and metal prices

Metal prices moved upward today, led by copper, platinum and palladium, helping Alcoa (NYSE:AA) climb 1.2 percent by the end of the trading day, finishing at $14.44.

Most of this was the result of the drop in the U.S. dollar, which seems to be moving back to its inverse relationships to commodities, which had been swinging back and forth as the result of the uncertainty of Europe's response to the Greece sovereign debt crisis.

There was also a positive mood in the market when it was announced consumer spending was up for the fifth month in a row, implying a possibility that the recession may be starting to finally wind down, although that is a premature conclusion at this time.

BP (NYSE: BP) and Renewable-Energy Hoax

Solar Energy Stimulus Spending Fiasco

With the shutdown of the solar panel manufacturing plant in Frederick, Maryland, it put the spotlight on the complete hoax behind the Obama administration assertion it was going to create 700,000 renewable-energy jobs with its $80 billion in stimulus spent on the sector.

Although the Obama administration may be creating renewable-energy jobs, those jobs are primarily located in Asian countries like China and India, not in the United States. Thanks Obama for spending our tax dollars on foreign job creation; tax dollars we don't have to spend.

In his usual cluelessness, Vice President Joe Biden said the $80 billion stimulus package was creating “unprecedented growth” in the solar and wind industries.

What is happening is companies in the U.S. are receiving funds to create jobs here, while expanding exponentially in other countries.

For example, First Solar, based in Tempe, Arizona received $16.3 million in taxpayer dollars for the purpose of hiring 200 people at a plant in Ohio. But in fact, just over 70 percent of their hiring will be in Malaysia.

U.S. Suntech Power Holdings Co. received $2.1 million to put together solar panels in Arizona, but they will hire about 11,000 people in China to build them.

This isn't saying they're taking the money and running, what it's saying it they're getting the money with the thought they were hiring in the U.S., when they really never had the intentions of doing it over the long term, but were committed to Asia all along.

As the closure in Maryland shows, U.S. companies can't compete in this area, so throwing money at the industry was never going to create jobs, but probably was just another way to shore up companies in the short term so they could survive long enough to expand into Asia.

If that's not the case, then someone will have to explain how so many companies missed their projections in how many jobs it would create for the long term. Not all of these and other could be that stupid in business practices.

This is a complete hoax, and again, there's no way the government couldn't have known this was the case, unless the people involved are so inept they are ignorant. What ruined their plans I think is the quickness in which the weakness of the idea failed. It wouldn't have been noticed as much if it had been a couple of years out. Now the U.S. government needs to answer on their wasteful spending for an industry that never had a chance in America.

Shareholders Sticking with Citigroup (NYSE:C)?

Citigroup and Treasury Selling Shares

We have the usual contradictions in a hyped stock in Citigroup (NYSE:C) as those like Dick Bove say it's time to buy and others are questioning whether shareholders should run from the stock now that the Treasury Department has said it's going to divest of their stake in common shares in the company in 2010.

The question is whether the sale of shares in the company will result in the price being knocked down for some time, or if the anticipated sales has already been priced into the stock.

The other concern is about the assets held in its specially-created Citi Holdings unit which exists to sell off the non-core or poorly performing assets. There's over $500 million held in that unit of the company, and until they're sold off, it lingers over the head of Citigroup.

Bove has stated he believe once the assets are divested and the company restructured, Citigroup should generate 70 cents a share in earnings.

As far as the government goes, it's an odd situation in that people consider the government holding onto the shares is a negative, the government selling them could dilute them, the government can sell them so they're considered strong, and the shares of Citigroup will be strong because the government says it is able to sell them.

Citigroup will remain a contradiction and anomaly for some time, and no matter what the many people say, it's very uncertain in the short- to mid-term where the company will head in share price, in my opinion.

Time to Buy Citigroup (NYSE:C) Says Dick Bove

Buy Citigroup now says Dick Bove

With the renewed commitment by the Treasury Department to divest of its stake in Citigroup (NYSE:C), and that action already being priced into the shares, Dick Bove says now is the time to buy Citigroup.

Bove has also raised his continually increasing target in the company from $7 to $8.50, and has upgraded the stock to a buy.

He doesn't think there will be a major upheaval from the sale of the shares by the Treasury because of the huge number of shares being sold on a daily basis, which should keep it from being overly diluted.

As far as the fundamentals go, Bove believes Citigroup can generate 70 cents a share in profits once the restructuring period is over.

Citigroup (NYSE:C) Taiwan Commercial Property Rising

Citigroup and Taiwan Commercial Property

Citigroup (NYSE:C) said Taiwan commercial property prices could rise as high as 15 percent over the next year, based on the upcoming signing of a trade agreement between the two countries.

According to Citigroup analyst Dave Chiou there are a lot of companies from mainland China who want to set up offices in Taiwan after the deal is signed, which is sure to increase the value of properties in the country.

The agreement mentioned is in regard to what is being called an economic cooperation framework agreement or ECFA, which will lower tariffs between the two countries and generate more investment between them.

Those close to the situation say even after signing the agreement though, it'll be a gradual entry into the country because of the inherent animosity between the two countries.

Uncertainty about the market and regulations in Taiwan could also make it a slow process. But if 15 percent is slow, they could really experience a commercial property bubble over the next several years once the uncertainties are removed.

PetroChina (NYSE:PTR) Spending $60 Billion for International Expansion

PetroChina Increasing Global Commodity Investments

PetroChina (NYSE:PTR) says it will spend a minimum of $60 billion over the next 10 years in acquiring international assets, as China's ongoing energy and fuel needs grow at a pace they're having a hard time keeping up with.

This isn't too hard to believe, as far as the $60 billion goes, as I think that's probably the low end of the estimate, considering China spend close to $7 billion in 2009 on acquiring reserves and refineries in a number of countries.

Still, even with the big numbers last year, before that PetroChina average from $2 billion to $3 billion for several years, so this is a big move for them as far as increasing their commitment to the sector.

In 2009 Chinese companies as a whole invested $32 billion in energy and mining-related companies, and it doesn't seem they're even close to being satisfied in those types of endeavors.

Shell (NYSE:RDS.A) Increases Natural Gas Stake in Texas

Royal Dutch Shell Natural Gas Holdings

Royal Dutch Shell (NYSE:RDS.A) has been increasing its position in a natural gas field in Texas to enlarge their position in the North American gas business, which has great promise for decades ahead.

The location of the Texas natural gas field is near San Antonio, and is called Eagle Ford. Shell leased another 150,000 acres in the region not too long ago in anticipation of increasing demand for the commodity.

Shell has been working the last couple of years to build up their portfolio in North America, and now have 2.4 million acres of land which holds up to 21 trillion cubic feet of natural gas.

Shell also has significant holdings in the U.S. Rockies and Louisiana, as well as in British Columbia and Alberta, Canada.

Shale gas could end up accounting for half of all U.S. natural gas supplied by 2035.

Teck Resources (NYSE:TCK) Increasing Coal Production by 50 Percent in 5 Years

Teck Resources Coal Production

Teck Resources (NYSE:TCK) has stated it wants to increase its coal production by 50 percent within five years as demand for coking coal skyrockets.

This is probably a realistic goal if it's predicated upon China's hunger for coking coal, as they can't get enough of it to feed their needs, even after they increased coal imports by 500 percent last year.

In 2010 expectations are China will import over 30 million tons of coal this year, as their domestic supply can't keep up with their demand from steel mills.

Steel production is projected to continue to increase in China for some time, and that will guarantee demand for coking coal will increase with it.

Teck Resources will increase revenue and profits with it if they can meet their coal production goals.

BHP Billiton (ASX:BHP) May Pay $4 Billion More in Rio Tinto (ASX:RIO) Joint Venture

BHP Billiton and Rio Tinto

BHP Billiton (ASX:BHP) may have to pay as much as $4 billion more in their joint venture with Rio Tinto (ASX:RIO) then originally planned, based on the iron ore assets Rio will add to the venture.

The reason for the major increase in price is iron ore prices are estimated to rise at levels which would warrant the higher price.

That would bring the total investment to between $7.5 billion to $9.8 billion, an increase of almost 70 percent over the equalization payment agreed to at the beginning of the deal.

The purpose of the joint venture is to combine a variety of resources to save a minimum of $10 billion for the companies. The deal still has to be approved by regulators before going forward.

Coal Prices Rise on BHP Billiton (ASE:BHP) Closing Hay Point

BHP Billiton Hay Point Coal Prices

Spot prices for coal rose after the closure BHP Billiton's (ASE:BHP) Hay Point terminal in Queensland.

Top quality coal had an offer price of $220 to $225 originally, but has been sold for between $240 to $250 a ton.

BHP declared force majeure on shipments from the Hay Point terminal after it had been damaged by cyclone ului, and has remained closed since March 11.

Hay Point is included in the venture between BHP and Mitsubishi named the BHP Mitsubishi Alliance, which is the largest producer of coking coal in the world for the seaborne market. Of the approximate 58 million tons produced annually, about 45 million tons are exported through Hay Point.

Saturday, March 27, 2010

Jim Rogers: No Currency Trustworthy

Jim Rogers on Currencies

In an interview on CNBC, Jim Rogers was asked about the lesser of evils concerning paper currencies, and he responded at this time there is no currency that stands in a strong position.

Rogers added he could foresee a time in the not-too-distant future where we may have to hold all of our money in real assets.

"All governments around the world are debasing their currencies," said Rogers, and even when looking for the best among the worst, Rogers, there isn't one that is "attractive on a fundamental basis."

As far as what he would hold at this time, Rogers said he's looking for cheap raw materials, and natural gas and and silver fit that bill nicely at this time.

On the other hand, speculators have entered the gold and oil markets, and Rogers said with the price of gold and oil going up so quickly, it's better to let them "consolidate and rest" for now.

Friday, March 26, 2010

Jim Rogers: Chinese Yuan to Explode in Value

Jim Rogers, China and Yuan

In a recent interview Jim Rogers said the Chinese yuan will explode in value over the next several decades, possibly quadrupling during that period of time against the U.S. dollar.

He compared it with the Japanese yen and how it went up about 400 percent over the last several decades against the greenback.

While Rogers believes the yuan should be allowed to float, he thinks it would be better for the yuan, but the idea of designating the Chinese as a currency manipulator publicly wouldn't help.

Rogers added the Chinese know they'll have to eventually allow their currency to float. It's just a matter of the right timing of it from the Chinese point of view.

Oil Prices Drop to $80 A Barrel

Oil prices down

Oil prices dropped 53 cents to end the session at $80 a barrel, ending the week down 2 percent.

Uncertainty about whether we're really pulling out of the recession continue to weigh on the minds of investors, and that has had an impact on oil prices which have been trading in a tight range recently because of no clues as to where things are headed economically.

While no clear direction remains, we'll continue to find oil reacting in this manner.

Commodities Rise as Greek Concerns Ease

Commodity Prices Going Up

Commodities had been taking a hit because of the indecision of Europe over the sovereign debt crisis in Greece. Now that a plan is in place to help Greece if they need it in the months ahead, commodities rebounded today in response to the news.

As far as the support from Europe, it's more of a support mechanism rather than loans offered to Greece in the present. It may or may not ever be used by Greece, but it's there as a backstop if the need ever arises. It also keeps many of the politicians in the region out of hot water with their constituents who largely opposed bailing Greece out.

If Europe is able to integrate better politically and learn from this crisis, gold should be a strong beneficiary, as it tends to move up when the euro is stronger and down when it is weaker against the U.S. dollar.

Almost all commodities responding be moving up in price on the news.

Soybeans Plunge on South American Production

Soybean Demand

Soybeans plunged to their lowest levels in two weeks as concerns over strong production in South America will cut back on demand for U.S. soybean exports.

On the Chicago Board of Trade soybean futures dropped 17l5 cents to $9.425 a bushel, the steepest fall in price since March 11.

Soybean exports in the U.S. are expected to drop quickly as the South American harvest is exported around the world.

Brazil and Argentina are the second and third largest soybean exporters, behind the No. 1 exporter - the United States.

The combination of their harvest will increase supply by about 35 percent, while global inventory will rise 44 percent. The USDA said this is the largest increase ever before the soybean harvest in the U.S. starts.

Soybean Demand

Schlumberger (NYSE:SLB) Acquires 'The Geoservices Group'

Schlumberger Buys 'The Geoservices Group'

Schlumberger (NYSE:SLB) announced it has made a deal to acquire French company 'The Geoservices Group' for $1.07 billion. The Geoservices Group is an oil service company.

French private equity firm 'Astorg Partner' owned the company, along with an unknown number of minority shareholders, which has operations in 52 countries and employs about 5,000 workers.

Geoservices helps its customers in identifying and taking care of any drilling hazards they may face, and provide a better understanding of the geographical area they're drilling in.

Geoservices has a technology called "mud logging" which will complement the drilling systems used by Schlumberger.

Schlumberger Buys 'The Geoservices Group'

Natural Gas Hits Record April Low

Natural Gas in Record April Low

As natural gas storage inventory grew last week, reports helped drive prices even lower, dropping it the lowest levels ever recorded in April, according to The Associated Press.

The lowest April price referred to was when contracts fell to $3.94 during the Thursday session.

Storage levels weren't able to be drawn down as thought, with warmer weather cutting back on demand.

For the five-year average, natural gas storage levels are 8 percent higher than usual.

Natural Gas in Record April Low

U.S. Natural Gas Fund (NYSEArca:UNG) Struggles On

U.S. Natural Gas Fund

The U.S. Natural Gas Fund (NYSEArca:UNG), whose fate is tied in with the movement of natural gas (as it tracks whichever direction natural gas takes, being an exchange-traded fund), has found itself struggling as it plunges in value along with the huge drop in natural gas prices.

Since January 1, 2010, the fund has lost close to $1.5 billion in assets, close to 33 percent of the entirety of the fund.

Close to $450 million in cash has also been redeemed by investors, while another $1 billion was lost on those shorting the fund.

The fund, which was birthed in 2007, is now experiencing its worst losses since its inception.

Energy analysts say natural gas futures will struggle to break the $4 mark in the near term.

U.S. Natural Gas Fund

Thursday, March 25, 2010

Commodity Prices Down on Greece Rescue Plans

Commodity Prices Down

Commodity prices and commodity stocks were down significantly for the day as plans to rescue Greece are implied to be in the works, underscoring the importance the market is placing on the European sovereign debt crisis and how it is affecting the euro, U.S. dollar and commodity prices.

Commodity companies taking a hit on the news of a plan for a Greece rescue include International Paper (NYSE:IP), which plunged 3.6%; Freeport McMoran Copper & Gold (NYSE:FCX), dropping 2.1%; and DuPont (NYSE:DD), falling 2.2%.

Commodity Prices Down

Natural Gas Futures Plunge

Natural Gas Futures

After a government report stating for the first time in 2010 natural gas inventory grew, natural gas futures prices plunged in response.

The extremely cold winter has generated increased demand for the fuel, but the warmer weather and slow drawdown couldn't cut the large surpluses, with gas levels moving to 8 percent higher than the five-year average.

Natural gas fell 15.9 cents for April delivery to $3.946 per 1,000 cubic feet on the NYMEX. It dropped as low as $3.940, the lowest ever recorded for an April contract.

Natural Gas Futures

Short-sellers Hitting Citigroup (NYSE:C) Hard

Citigroup and Short Sellers

Citigroup (NYSE:C) is the top target for short-sellers as the stock has been surging upward for most of March for little reason, and it seems it could come crashing down at any time.

Fundamentals haven't changed much at the company to warrant such an upward move, and the lingering government stake in the company keeps everything from really moving upwards in an even bigger way.

What could clobber the shorts would be if the government unexpectedly said they were divesting of its stake in Citigroup, which would give it a big increase in share price.

Morgan Stanley (NYSE:MS) Reduces EPS Estimates for Archer Daniels Midland (NYSE:ADM)

Morgan Stanley Lowers Archer Daniels Midland Earnings Estimate

Based largely on declining ethanol profits, Morgan Stanley (NYSE:MS) reduced its estimate for earnings per share for Archer Daniels Midland (NYSE:ADM), saying ethanol profits, or lack of them, will pressure earnings through 2011.

In spite of the downgrade in estimate for earnings per share, Morgan Stanley did maintain its $33 a share price target and kept the stock at an Equal Weight rating.

Archer Daniels was down almost 3 percent on the day.

Goldman Sachs (NYSE:GS) Downgrades Utilities

Goldman Sachs Downgrades Utilities

Goldman Sachs (NYSE:GS) analyst Michael Lapides downgraded the utility sector in general from "Attractive" to "Neutral."

Lapides has changed his tune on this one, saying his previous upgrade of utilities was premature, especially since prices of natural gas are uncertain going forward.

Strangely, Lapides expected prices to increase based on getting rid of inexpensive electrical costs by pressuring coal plants to taken offline, as well as what I would call draconian environmental regulations which would strangle poor people who will struggle to make it if that were to happen.

So much for wishful thinking and activist grading, which doesn't belong among legitimate analysts.

The difficult economy shows why inexpensive energy is vital for the majority of people who would otherwise be unable to pay their bills.

JPMorgan (NYSE:JPM) Upgrades Jacobs Engineering (NYSE:JEC)

Jacobs Engineering Upgraded by JPMorgan

Jacobs Engineering (NYSE:JEC) received a nice bounce later in the day after JPMorgan (NYSE:JPM) upgrdded the stock from "Neutral" to "Overweight."

Reasons cited by analyst Scott Levine were higher margins than its competitors, probable increased construction demand, and a strong balance sheet.

The strong balance sheet offers Jacobs and opportunity to grow through acquisitons, and also to expand into new markets, according to Levine.

Alcoa (NYSE:AA) Falls on Strong Dollar

Alcoa and Sovereign Debt in Europe

Fundamentals aren't driving commodity-related stocks at this time, as the sovereign debt fiasco in Europe is making the U.S. dollar look good, in spite of its own problems. Alcoa (NYSE:AA), like other commodity companies and commodity stocks are having downward pressure put on their share prices as a consequence.

The euro is under such pressure that people have already forgotten the problems with the U.S. dollar, as at this time they're insignificant in comparison to the euro.

Much of this was precipitated yesterday by Portugal's debt being downgraded by Fitch Rating, which caused havoc in the commodities market.

The U.S. dollar reached a 10-month high against the euro on the growing concerns over sovereign debt in Europe.

Wednesday, March 24, 2010

Citigroup (NYSE:C) Analyst Projects China Bust

China going to bust?

Citigroup (NYSE:C) analyst Willem Buiter has joined a chorus of others who have predicted China is set for a bust, and Buiter claims it could last for a period of three years, and doesn't believe it can be avoided, even if China tightens its monetary policies, which it has said it was going to do, but hasn't yet.

Like others, Buiter largely bases his assertion on the residential and commercial real estate markets in China, which could end up creating a domino effect.

The one problem I have with Buiter is the idea is also based on whether or not the Chinese government is doing anything.

“What is policy in China doing about the threat of overheating in the financial and real economy?” Buiter said. “The short answer is: not much, and not enough to prevent the creation of what could become a major asset boom, bubble and bust.”

Obviously this is a Keynesian thought, and economists like this think the world is falling if the government isn't interfering.

China for its part says they've seen nothing to indicate their economy is in a state of recovery. I think the West could take a lesson from that observation as well. Everywhere you read the mainstream media makes it sound like we're really in a big recovery, when data shows we're far form that being a reality.

Portugal Credit Downgraded by Fitch Ratings

Portugal Sovereign Debt

Fitch Ratings downgraded the long-term credit of Portugal from AA to AA-, reinforcing the depth of the crisis Europe and the euro continue to face.

Pierre-Oliver Beffy, chief economist at Exane, said sovereign risk will continue to be an issue in the region for another 5-10 years. Beffy added, "We think that the Fitch comment is very lagged and reflects the adjustment of rating to lower growth outlook in countries where austerity plans are implemented."

Almost everywhere I read this has attempted to be made to look like an irrelevant event, but in fact it's extremely important, not simply as a reminder of the problems facing Europe and the euro, but as a mirror of the reality of the depth of those problems.

We probably haven't even began to see the consequences of the problems in Europe yet, and that's not only in reference to Portugal, Italy, Ireland, Greece and Spain. Other countries are struggling as well, although that's not as easy to discern on the surface as the more obvious PIIGS are.

Portugal Sovereign Debt

Dollar Up, Commodities Down

Sovereign Debt Putting Downward Pressure on Commodities

The continuing sovereign debt fiasco in Europe has caused investors to look to the U.S. dollar and gold as their choice of currency for safety. And yes, gold is increasingly being thought of a form of currency again by people, as they begin to learn the inherent weakness in paper currencies.

An interesting part of all of this is as the crisis in Europe continues to unfold, it forces investors to decide whether to invest in gold or the U.S. dollar for a place of safety, and many times that has resulted in both going up in price on the same day, telling us people are thinking of both of the commodities as a place to be.

As far as commodities in general, they won't behave in a similar matter because of being denominated in U.S. dollars. When the dollar goes up, foreign investors tend to flee commodities for that reason.

It's not that the U.S. dollar is on a rebound or considered healthy in any way, it's that when you compare it to the euro especially, it makes it look robust in comparison. That's what's largely driving this reaction to commodities, and it will continue on in what should be some wild swings unrelated to supply and demand.

Portugal today was downgraded for its debt by Fitch Ratings, adding another element to the sovereign debt crisis in Europe, which seems to only be getting started as to the revelation on how deep it really is.

Citigroup (NYSE:) Bid to Drop EMI Lawsuit Rejected by Judge

Business News: Citigroup

Citigroup (NYSE:) had been seeking to get the lawsuit from Terra Firma Capital Partners dismissed, where they were accused of manipulating Terra Firma into acquiring EMI Group.

What the rejection to dismiss the suit means is U.S. District Judge Jed Rakoff ruled the case should be decided in the U.K. Rakoff said he'll write a opinion to explain his ruling in the matter.

According to Terra Firma, Citigroup had withheld information concerning Cerberus Capital Management, which they allege Citigroup told them was still bidding for EMI, when in fact they were no longer going after the company.

Cerberus, like Terra Firma, is a private equity company.

Terra Firma is seeking billions in dollars of lost equity and punitive damages in the case.

Citigroup did have vested interests in EMI, as it was the only one advising and lending on behalf of EMI, although they were also the only financier for Terra Firma as well.

Bill Gates' Nuclear Strategy

Bill Gates and Small Nuclear Reactors

Bill Gates wants to put nuclear power in the hands of emerging nations via nuclear energy reactors fueled by the relatively harmless uranium-238.

Essentially what the miniature nuclear reactors would do, once they were boosted by enriched uranium, would be to run anywhere from 50 50 100 years without the need to refuel. The reactor would offer several hundred megawatts to the users.

That's according to TerraPower, a firm backed by Bill Gates.

Caterpillar (NYSE:CAT) Leads Dow Upward

Caterpillar up on belief demand for equipment will rise

Caterpillar (NYSE:CAT) was the top performer of the Dow on Tuesday, increasing to $62.41 and growing in after hours trading as well. For the day Caterpillar ended the session ahead $2.46.

Much of the upward movement in Caterpillar was based on the belief were are actually in an economic recovery, something yet to be proven, and more of wishful thinking than a reality.

This is important because it suggests demand for industrial equipment will rise, even though that hasn't happened much if any, beyond replenishment.

We have yet to see much in sales related to growth, and until that happens these share price movements are going to swing wildly.

J.P. Morgan (NYSE:JPM): Refining Margins Shrinking

Refining Margins Shrinking

J.P. Morgan (NYSE:JPM) analysts said refining margins across the globe are probably going to shrink starting in April and May, citing the large amount of maintenance needed starting in March.

Maintenance isn't usually done this early in the year, and it caused some to search out the causes of inventories having a higher amount of product taken from it than usual.

The result has been backwardation, which means short-term gas and other related refining products are higher price than the future contracts.

“Refiners are already buying the crude for this rebound, hence the tightening crude spreads,” JPMorgan said. “Tighter crude, weaker products and demand for fuel oil are a recipe for a collapse in refining margins.”

Refining Margins Shrinking

U.S. Steel (NYSE:N), Nucor (NYSE:NUE), AK Steel (NYSE:AKS) and Steel Dynamics (NASDAQ:STLD) Rise On Improved Production

World Steel Association Report

Major steelmakers made big moves as data released Tuesday revealed demand for steel products has resulted in increased production and capacity rates at companies like U.S. Steel (NYSE:N), Nucor (NYSE:NUE), AK Steel (NYSE:AKS) and Steel Dynamics (NASDAQ:STLD).

Data from the World Steel Association showed operating rates at steel plants were their highest since September 2008, while worldwide steel production increased 24.2 percent from February 2009.

Output for crude steel surged by 51.3 percent to just under 6 million tons in February as well.

Utilization is expected to average far above 2009 levels, which were at 62.8 percent in the fourth quarter of 2009, increasing to an average between 70 percent to 75 percent, said the report.

Predictably the news sent stocks of steelmaker surging.

Goldman Sachs (NYSE:GS): Global Food Reserves Falling

Goldman Sachs: Food reserves as percentage of consumption

Food commodities have been a difficult sector to figure out, as there are a lot of conflicting element involved in the overall equation, and it'll take time to sort it all out. Goldman Sachs (NYSE:GS) says global food commodities, while having record ending stocks this year for some of them, when taken together as a percent of consumption, drops by 17 percent.

While most of us understand the population growth which will generate more food demand, there is also the supply side, which in many cases has created the record ending stock because of so many countries growing major crops for their own people and exports. That has put and kept downward pressure on food prices for a while now.

We'll know if and when food demand outpaces supply, as the prices of food will respond almost immediately.

When taking into account the 30-year average for reserves as a percentage of consumption, which is 27.7 percent, you can see there could be the possibility of a surge in food prices.

There's no way to no the bottom of course, but we're down in the major food commodities and there isn't a lot of room more to go.

Marc Faber: Food at 200 Year Low

Marc Faber on Food Commodity Prices

Recently Marc Faber was talking food commodities and stated as a whole they are at their lowest levels when measured by real time dollars.

Faber said: “Food commodities are at 200 year lows in real time dollars.”

The question for the majority of food commodities is whether the supply of food will increase at a rate the demand is through a growing population.

Right now it seems there is a huge supply because, in fact there is. But that supply has come from a number of countries increasing their domestic acreage to grow a variety of commodities, especially major ones like wheat, corn and soybeans.

Once this come to fruition, the question then will be answered as to how the price of food commodities will react in the years ahead.

Even droughts and other events which bring down crop production hasn't dented the larger agricultural commodities because of the enormous amount being planted.

Eventually all of this will come to a head, but for now it seems a lot of the major food commodities will have downward pressure on prices.

One other major factor is the cost of inputs, which have seemed to rise in price some lately, but that can be offset by genetically modified plants which largely reduce the needs of those inputs, depending on which particular crop you're talking about.

The bottom won't hit with food commodities as a whole in my opinion, but they will be hit on a crop by crop basis, even more so the further you move from the major foods we eat.

Marc Faber on Food Commodity Prices

ConocoPhillips (NYSE:COP) Selling Half of Lukoil Stake

Conoco Shedding Lukoil Assets

ConocoPhillips (NYSE:COP) communicated to Russian-based Lukoil Holdings that it was going to sell up to half of its stake in the company over the next two years. Conoco owns a 20 percent stake in Lukoil.

Assuming Lukoil prices hold close to today's share price, the sell of the shares in the company would bring about $4.7 billion to Conoco's coffers.

Conoco wants to sell about $10 billion in assets to strengthen its financial position.

Other than one project in the Russian Arctic region, there hasn't been any new operations by Lukoil with Conoco, making it easier for Conoco to make the decision to sell a portion of their stake.

Conoco Shedding Lukoil Assets

Raw Sugar Prices Lowest Since 2006

Raw Sugar Prices Plunge

We haven't seen raw sugar prices this low since June 2006, as the sweetener dropped to over 7 percent to finish the session at 16.57 cents a pound.

Most of the ongoing fall in raw sugar prices has come from the supply coming out of India, where it increasingly looks like a bumber crop this year.

In February raw sugar had hit its highest levels in 29 years, but now has dropped 45 percent since that time.

Anyalysts say there is panic selling now with raw sugar as there are no clues as to when it'll bottom out.

Raw Sugar Prices Plunge

Exco Resources (NYSE:XCO) Marcellus Shale Joint Venture

Exco Resources Marcellus Shale

According to CEO Douglas Miller, within a couple of weeks Exco Resources Inc. (NYSE:XCO) could announce a joint venture in the Marcellus shale.

Increased drilling in the region by companies like Chesapeake Energy Corp. (NYSE:CHK), Encana Corp. (NYSE:ECA) and Petrohawk Energy Corp. (NYSE:HK) has raised costs, making it more profitable to attract a partner than bear the cost themselves.

Miller didn't release any potential partners in the Marcellus shale play, although he's looking at a number of options before making a final decision.

Exco Resources Marcellus Shale

Tuesday, March 23, 2010

Brazil's Vale (SA:VALE5) Changing Pricing Policy

Vale Changing Pricing Policy

In an attempt to offer a more flexible policy for the pricing of iron ore, Brazil mining company Vale (SA:VALE5) is pushing for a short term, quarterly pricing schedule which will reflect the market more closely than pricing of iron ore in the past.

Some watching the industry say it could increase iron ore prices by over 75 percent in the short term, but it could provide a lot more stability to the market in the long term.

Vale said once talks over over they'll give a more clear picture on where things stand concerning pricing.

Mexican Peso Rises on Inflation Bond Sale

Mexican Peso Inflation Bond Sale

The inflation bonds recently offered by the Mexican government have helped the Mexican peso rise over the last couple of days as it is believed foreign investors will buy them up.

Surprisingly, the Mexican peso has performed best against the U.S. dollar of the 16 major currencies in 2010.

It is estimated about $1.2 billion in 30-year bonds will be sold today.

“These bonds have a certain advantage and will be of interest to foreign and domestic investors,” Arnulfo Rodriguez, head of fixed income research, at Citigroup’s (NYSE:C) Banamex unit. “If inflation reaches 5 percent, than we are talking about an implicit rate of 9 percent, which would be very attractive.”

Freeport-McMoRan (NYSE:FCX) and Southern Copper (NYSE:SCCO) Going to Struggle?

Freeport-McMoRan and Southern Copper

While everything seems to be on fire so for investing in 2010, there is one element to take into consideration that may cause a healthy check, and that is the performance of copper stocks like Freeport-McMoRan (NYSE:FCX) and Southern Copper (NYSE:SCCO), who haven't rebounded to their highs in January 2010.

This is probably a sign that there is still low demand for copper, which of course means contruction remains depressed and other than China, and smaller areas of Asia, there isn't much going on in that sector.

So unless China really goes full steam ahead, which looks like it's going to do the opposite, we're going to see companies with heavy copper exposure like Freeport-McMoRan and Southern Copper struggle throughout the year.

Freeport-McMoRan and Southern Copper

BG Group (LSE:BG) $80 Billion Deal with China National Offshore Oil Corp

BG Group in Huge Natural Gas Deal with China

BG Group (LSE:BG) is about to sign a major deal worth from $50 billion to up to $80 billion with China National Offshore Oil Corp for a liquified natural gas agreement.

If prices are close to last years' prices, the deal would be close to the higher end of $80 billion.

This is why Australia and China have been working hard behind the scenes to patch up their relationships, as this follows a deal with PetroChina and Royal Dutch Shell for Arrow Energy, also based in Australia for $3.4 billion. That was for coal-seam gas.

BG Group in Huge Natural Gas Deal with China

Morgan Stanley (NYSE:MS), US Steel (NYSE:X), European Sovereign Debt Crisis

US Steel has large exposure to European sovereign debt crisis

There are a number of companies based in the United States which have a strong presence in Europe, making them extremely vulnerable to the emerging sovereign debt crisis which isn't limited to Greece. One of those is US Steel Corporation (NYSE:X) which generates 27 percent of their revenue from the European nations.

It does make me wonder if Morgan Stanley (NYSE:MS) analyst Mark Liinamaa thought of that when he raised his target on US Steel from $58 to $62.

Of course the increased prices this year will help the company, and there is no way of knowing how quickly or deeply a sovereign default would affect a company, as it would depend on the country and the ability and will of other European nations to respond.

Looking at the fiasco of Greece, not just with their fiscal irresponsibility, but the wary response of the rest of Europe toward helping them out, you have to wonder what would happen if it was Spain or a much larger country like them about to default on their debt.

While there is no reason to panic, it should cause everyone to check their stock portfolio to see if the companies in them are highly exposed to Europe. You may be surprised at what you find.

Newmont Mining (NYSE:NEM) Risky Europe Crisis

Newmont Mining Has Huge Exposure to Europe

Possibly of all the mining companies, Newmont Mining (NYSE:NEM) has to be trembling in light of the sovereign debt crisis in Europe, which Greece now the face of, but a number of countries could easily follow.

The reason why Newmont Mining has the potential to be a major problem is a huge 72 percent of all its revenue comes from Europe.

So if things spread beyond Greece, which they have a very good chance to, Newmont Mining could get clobbered as a result.

Newmont isn't the only company with significant exposure to Europe, as a large number of companies which considered them safe could take a beating over the next several years if Portugal, Ireland, Italy or Spain experience sovereign debt problems close to the magnitude of Greece. Any one of them could, and it bears going over your portfolio to see how exposed your companies are to the continent.

Ecuador Appeals Chevron (NYSE:CVX) Arbitration Ruling

Chevron and Ecuador Lawsuit

The decision by a U.S. judge to allow Chevron Corp (NYSE:CVX) to seek arbitration in a case related to Texaco allegedly polluting a portion of the Amazon jungle they were working in. Texaco was acquired by Chevron in 2001, making Chevron a part of the case now.

Chevron has said the government of Ecuador has interfered in the case and broken the U.S.-Ecuador Bilateral Investment Treaty by not forcing a court in Sucumbus province dismiss the case.

Chevron is seeking international arbitration at this time, which is what the judge ruled in favor of.

Ecuador appealed the ruling which could mount to $27 billion in liability for the company if it is ruled against before it's all over. The case has been ongoing since 1993.

Petrobras (NYSE:PBR) Second to Exxon Mobil (NYSE:XOM)

Petrobras Second in Profits Only to Exxon Mobil in Americas

One consulting agency, Economatica, declared Petrobas (NYSE:PBR) was second only to Exxon Mobil (NYSE:XOM) in profits for the Americas in 2009.

Net profits for Petrobras in 2009 came to $16.6 billion according to Economatica.

Exxon Mobil still holds a solid lead over Petrobras, as they generated $19.28 billion in profits for 2009, about a 13.7 percent difference.

Still Petrobras has been closing the gap, as it's the smallest difference between the two companies since 1994.

Petrobras is the only company in the top 20 of the Americas from Brazil, with the rest based in the United States.

PetroChina (NYSE:PTR) Royal Dutch Shell (NYSE:RDS-B) Acquire Arrow Energy

PetroChina and Royal Dutch Shell Acquire Arrow Energy

After increasing their offer by 6 percent, PetroChina (NYSE:PTR) and Royal Dutch Shell (NYSE:RDS-B) agreed to acquire Arrow Energy for $3.1 billion.

This is the first entry by a Chinese company into the natural gas trapped in the coal of Queensland, Australia. Arrow owns the coal-seam gas resources reserves in the region.

The price is considered a premium of 35 percent over the original pre-announcement close.

Australian regulators will have to approve the deal, but there's no indication that will be a problem. Shareholders will also have to vote to approve the deal, which was recommended by the board of the company to accept.

Alcoa Inc. (NYSE:AA) Picks Up After Hours

Alcoa Gains After Hours

Alcoa dropped earlier yesterday, and dropped as low as $13.90 before rebounding some in after hours, where as of this writing has increased to $14.35 a share. It had went as high as $14.45 a share at one time.

Much of the negative activity came about from metal prices falling during the day.

Even though Alcoa had experienced a major drop in sales last year, they cut costs significantly, along with capital spending, where it doubled its cash holdings to $1.5 billion.

This gave them a nice cushion and money available to grow through acquisitions or improve production.

Alcoa opened at $14.06 yesterday morning.

Monday, March 22, 2010

Dick Bove Upgrades Citigroup (NYSE:C) to Buy

Citigroup upgraded by Bove

Citigroup (NYSE:C) got some more wind in its sales as Rochdale analyst Dick Bove upgraded the stock from neutral to buy.

Interestingly, he viewed the government getting rid of the 7.7 billion shares it owns in Citigroup as the major reason behind his thinking.

Essentially he through out the actual condition of the company and the long term challenges it faces.

But it is understandable concerning Bove's reasoning, as many investors feel as long as the government is wrapped around the neck of Citigroup they'll be held back and not able to take the necessary steps to move forward.

Bove increased his target price for Citigroup from $3.75 to $5.

Barrick Gold (TSE:ABX) Increases Reserve Estimates at Donlin Creek

Barrick Gold Donlin Creek Gold Project

Barrick Gold (TSE:ABX), which holds a 50 percent stake in the Donlin Creek Gold Project with NovaGold Resources (TSE:NG), has increased the reserve/resource estimates for its Donlin Creek Gold Project by 4.3 million ounces.

The amount of reserve/resource of gold at the site now stands at an estimated 33.6 million ounces.

Barrick Gold's portion of the gold reserves, along with NovaGold's, are 16.8 million ounces each.

Bank of America (NYSE:BAC) CEO China Visit

Bank of America's China Strategy

Bank of America (NYSE:BAC) has been working hard to go beyond its limited China presence via the China Construction Bank to being granted licenses of its own which it can have much better branding control over.

What Bank of America wants to do, and the reason CEO Brian Moynihan is visiting China, is to be allowed to expand its current products in the Chinese market beyond retail banking to commercial and corporate banking.

Competitors in China like JPMorgan (NYSE:JPM) are working on joint ventures with Chinese companies where they can underwrite stock offerings in the country, a major advantage over Bank of America. Other competitors already have these types of deals in place.

The strategy to implement the plan is to be incorporate locally in the country, which would allow the company to provide many more products there.

Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP) Coming Back to Texas?

Exxon Mobil, Chevron, ConocoPhillips and Texas

It has been a long time since major oil companies like Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and ConocoPhillips (NYSE:COP) had significant stakes in oil and gas in Texas, but with new technology, that could be about to change, as evidenced by the acquisition of XTO by Exxon Mobil, which may be the first of many as oil and gas producers look for new production sites.

To get an idea of how things have changed over the last 15 years or so, independent companies drilled 96 percent of the well in Texas in 2008, while the five major companies, which include Exxon Mobil, Chevron, ConocoPhillips, Shell and BP, only accounted the remaining 4 percent.

Some of the drilling spots left by the majors had significant reserves in them, but the cost of extracting it was prohibitive at the time, with prices not able to support it. Now with prices up and cost lowered, as well as new ways to extract the oil and gas, major companies may be revisiting Texas to get a piece of the significant pie that still remains under the ground there.

Marc Faber: Chinese Economy Will Slow, Not Crash

Marc Faber on Chinese Economy

Investment expert Marc Faber said the Chinese economy, which a number of economists and analysts have said could crash sometime soon, won't crash, but it will definitely slow down in the second half of 2010.

Some feel even if the Chinese economy does slow down, it'll still grow at a rate of 8 to 9 percent; solid growth by almost any standard.

Some American politicians, along with the increasingly irrelevant Paul Krugman, have been publicly blasting China for its monetary policy, a type of action that has never worked with Asian people, and is not the best way to gain cooperation.

China will eventually change its monetary policy, but these types of populist actions are just plain stupid and bad strategy.

The Chinese would win the battle if they simply decided not to acquire any more U.S. Treasury instruments, and could do more damage if they decided to sell them as well, as the Fed would then have to print hundreds of billions to purchase them, which would drive down the value of the U.S. dollar even more, which would bring a lot of consequences to the country.

BHP Billiton (NYSE:BHP): Good Investment?

Is it a good time to invest in BHP Billiton?

BHP Billiton (NYSE:BHP) is one of the most diversified and largest of all commodity companies, as most people know. The question now is, is it a good time to invest in BHP Billiton or should you wait?

As of this writing, BHP Billiton has a market cap well over $200 billion, and operations on six continents.

To make a decision as simple as possible, as you can wear yourself out trying to trace every aspect of this company, especially when commodity prices can be strongly effected by geo-political circumstances. And when you have a company as large and diversified as BHP Billiton, they can be booming in one part of the world and getting hammered in another part.

So with that in mind, it's better, as far as it relates to BHP, to solely base your decision on supply and demand, and how the company is weighted during this season of time.

And when talking of supply and demand, we're largely talking primarily about China, and secondarily about India. As China and India go, that's how demand will go on a macro-economic scale.

Even if China tightens their capital markets, they are still expected to grow at an eight to nine percent rate. Still huge by any measurement you use.

Another key element in investing in BHP Billington will be the actions of major central banks around the world concerning interest rates.

If you think interest rates will go up soon, it could be a bad time to invest in a company like BHP, but if you think they'll stay low for some time, then investing now could reap some nice returns.

BHP is still close to 20 percent below its highs in 2008, so there is room to move up for them.

Even in these extremely volatile times, supply and demand will eventually win out on investing in commodities, and even though temporary events can cause huge fluctuations, that should be the deciding factor for investing in any commodity company. Otherwise there are too many variables to consider that can really be made sense of in a cohesive way which can lead to an informed decision.

Sunday, March 21, 2010

Paul Krugman Clueless on China ... and Everything Else

Peter Schiff in talking about Paul Krugman - who doesn't have the right to be called an economist - asked for the Nobel Prize committee to take the medal back for stirring up issues with China that will end up doing the U.S. great harm.

Schiff calls out Krugman on calling for an economic war with China, where Krugman believes China no longer purchasing Treasuries is a winner for the U.S. and devastating to China.

But if China were to sell its existing debt or refuse to buy any more, the Fed would be forced to again ramp up the printing presses and throw more money at the problem, which even Krugman admits would cause the value of the U.S. dollar to fall; something he thinks would be good for all of us.

That would drive up prices for American consumers, although it would temporarily help American-made products to be more competitive on the world stage.

Consequently, the standard of living for most Americans would plunge, while the Chinese standard of living would continue to rise. That doesn't sound like a winning hand for America, and it isn't.

The Chinese would start to have their domestic prices lowered while their own factories would do the majority of the supplying of those goods.

Commodity prices in that scenario would also fall steeply, making it easier and cheaper for China to produce products to serve their people.

Being a fading Keynesian, all Krugman can think of is printing money will solve all economic problems. The idea of transferring that thought stupidly to the Chinese monetary situation is reckless and ignorant. No wonder Schiff is calling for the Nobel Prize committee to take the medal back from Krugman.

Of course he should never have received it in the first place.

Saturday, March 20, 2010

Marc Faber: New Gold Standard Already Created

Marc Faber on Gold

Marc Faber recently sad in an interview that we have already entered into a new gold standard; one created by the free market and not anyone else.

Faber cited the increasing acquisition of physical gold by investors as well as the growing number of exchange traded funds.

In his interview Faber recommended that people flee cash and bonds over the next decade and buy gold and some equities.

Gold will continue to rise in value against all paper currencies which are depreciating said Faber.

Friday, March 19, 2010

Caterpillar Inc. (NYSE:CAT): Health Bill Disaster

The outrageous and attempted, forced imposition of the socialist health care bill on Americans would be devastating according to Caterpillar Inc. (NYSE:CAT), which said it'll increase costs for the company by $100 million.

It's incredible to see the blind fury of Democrats and the obviously mentally disturbed Obama push this distructive outrage on Americans, who by a wide majority oppose the plan.

Even a letter from over 130 economists saying it would devastate the economy and job creation, as companies would hire far less workers while cutting back wages and working hours for those they already have didn't have any effect on these people.

Most of the $100 million in cost to Caterpillar will be in relationship to subsidies they will lose connected to prescription drugs for its retired people.

A provision to force employers to cover adult children up to the age of 26, plus the removal of the tax exemption on drug subsidies, combined will add another $100 million in just the first year of the so-called health reform. That's reform we can do without.

Gold Reserve Currency Says Citigroup (NYSE:C) Analyst

Gold as reserve currency

In an extraordinary statement, Citigroup (NYSE:C) analyst Dennis Gartman said the major reason for the unique behavior of gold in regard to its usual inverse relationship with the U.S. dollar has changed, is people are now considering gold to be a real reserve currency, equal to the U.S. dollar.

Of course for some that follow these things closely, they've believed that for years, but to see this in the mainstream media is a major story, to say the least.

So when the U.S. dollar goes up and gold goes up with it, that's a sign that many investors now consider gold as much of a reserve currency as the dollar is. And Gartman added this isn't just a fad, but a "trend [that] shall continue months, if not years, into the future."

Gold as reserve currency

Aurizon (TSE:ARZ) Beats Quarterly Estimates

Aurizon beats estimates for quarter

Aurizon Mines Ltd beat analyst estimates by increasing earnings to C$9.9 million, or C6 cents a share for the last quarter. Last year in the same quarter earnings a share came in at a loss of C$4.1 million, or C3 cents a share.

While an increase in gold prices was the key reason for the increase in profits, there was also C$4.5 million of non-refundable tax credits which helped them as well.

Analysts had been looking for earnings of C4 cents a share of revenue of C$36.7 million.

One concern for 2010 is the decreasing gold production at their major mine in Quebec, which is expected to fall from 159,261 ounces in 2009 to between 145,000 and 155,000 in 2010. Lower grades of gold was cited as the reason behind that.

That could be why Aurizon Mines has mentioned acquiring early stage gold mines in the near future.

Aluminum Corp. China (NYSE:ACH), Rio Tinto (ASE:RIO) Partnering

Aluminum Corp. Partners with Rio Tinto on Guinea Project

Forget about the tensions that have been seething under the service over the last year between Australia and China, as demand for raw materials is changing their relation positive again as Aluminum Corp. China (NYSE:ACH) and Rio Tinto (ASE:RIO) are partnering in a Guinea project.

With Rio Tinto short on cash to develop their properties in Guinea and Mongolia, they are partnering with Aluminum Corp. to get access to capital in order to forge forward faster.

The Guinea mine will be co-developed by the two companies in the new partnership, with Chinalco taking a 47 percent stake in the venture.

Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) Drop as Oil Falls

Exxon Mobil, Chevron Down with Oil Futures

Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) dropped in early trading as crude oil futures fell below $81 a barrel.

This wasn't a complete surprise, as it seems the market was looking for an excuse for a breather after a week of moving upward.

Pressures also came from ongoing concerns over Greek sovereign debt and the Reserve Bank of India surprisingly increasing its repurchase rate to 5 percent, something that caught the markets off guard.

Worries are circulating that China could be next in line to make a similar move.

Goldman Sachs (NYSE:GS): Commodities, Currencies Up in 2010

Goldman Sachs on Commodities and Currencies

Goldman Sachs (NYSE:GS) lowered estimates for a number of banks and financial institutions today, including Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM) and Morgan Stanley (NYSE:MS).

While that put downward pressure on the share prices of the stock, there was some good news in general in areas of interest for us.

Goldman maintains and confirms that currencies, commodities and fixed income investments should do good in 2010, something most of us at Commodity Surge would agree with.

Nucor (NYSE:NUE) Raising SBQ Prices

Nucor Corporation Raising Special Bar Quality Prices

Nucor Corporation (NYSE:NUE) communicated to its customers on Thursday they will be increasing the price of special bar quality (SBQ) products by $30 a ton starting with shipments leaving May 1.

Other companies have made similar announcements this week, with some products going as high as $40 a ton, such as alloy heat-treated and quench-and-tempered cold-finished bars produced by Gerdau Macsteel.

Demand has been largely the reason behind the increased prices, along with low supply. Another factor is the higher cost of raw materials to produce the various products.

Caterpillar (NYSE:CAT) Global Sales Down 20 Percent

Caterpillar Global Sales Down

Caterpillar gave an early warning on Thursday that global sales for the last three months will be down on an annual basis by 20 percent.

The market seems to have largely shrugged this off, although I'm not sure how much the news had spread yet.

Its news on turbine engines and reciprocating engines was even worse, will sales plunging by 33 percent for the three-month period ending February 10.

Caterpillar was hit especially hard in the Latin America and Asian markets, which had been more reliable, while continued weakness in North America, Europe, the Middle East and Africa continue.

Caterpillar Global Sales Down

BG (LON:BG) Behind Exxon Mobil (NYSE:XOM) Rumor?

BG and Exxon Mobil Acquisition Rumors

There always seems to be a new rumor concerning EXxon Mobil (NYSE:XOM) acquiring BG (LON:BG), and as usual, there is a brief upward movement of BG stock before it falls back to earth.

It does make one wonder whether BG is the one that instigates the rumors, as it can generate a lot of free publicity, although if they did, they would have to be careful not to incur the wrath of regulators if it were to be discovered they did.

This is my own rumor of course, as there's nothing to prove BG has been behind some of these rumors over the years.

It does make one wonder if someone with a vested interest somewhere does keep these rumors circulating in order to make some quick money or get free publicity for the company.

IronPlanet Files for IPO

IronPlanet IPO

Online heavy equipment reseller IronPlanet Inc. has filed for a $92 million IPO according to filings with the U.S. Securities and Exchange Commission.

IronPlanet is a pure Internet play focusing on auctioning off used agricultural and construction equipment around the world. While there are no specific figures from the currently privately held company, it is estimated their sales are in the hundreds of millions annually.

What is known are the revenue and profits generated by the company, with revenue in 2008 to 2009 growing from $35 million to $54.7 million. Profits in 2009 stood at $12.9 million, a major increase from profits of $1.9 million in 2008.

This seem to show the extremely low overhead and costs the company incurs, at least with the 2009 contrast between revenue and profits, which were extraordinary if you project them out.

The difference in 2008 contrast between revenue and profit was much less successful, probably related to a learning curve and marketing the company in the early stages.

IronPlanet IPO

Thursday, March 18, 2010

J.P. Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS), T. Rowe Price (Nasdaq:TROW) Launching ETFs

Investment Banks and ETFs

J.P. Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS), T. Rowe Price (Nasdaq:TROW) are all looking at launching ETFs in the future, and most of these will be actively managed exchange-traded funds, built to generated higher fees than their passively-managed cousins.

ETFs continue to grow as a very popular alternative for investors, especially those who like to put their money into an investment vehicle and let it ride.

The question which remains to be answered is why someone would invest in an actively managed ETF and pay more, when they already essentially can do that with thousands of mutual funds. It makes little sense to me, but maybe investors will think there's more to it than that, and will give them a try.

These types of ETFs will take a long time to take off, and similar to other investments like them, will need to build a track record which proves they can outperform index-based ETFs. That and prove the added fees are worth the price. It'll take years for that to come about, so this is a long term play by all these companies.

Alcoa (NYSE: AA) Testing Aluminum Solar Power Mirrors

Alcoa Testing Aluminum Mirrors for Solar Power

Alcoa (NYSE: AA) is working with the National Renewable Energy Lab in Colorado to test how mirrors made with aluminum will work in place of glass to generate solar power.

The two entities are testing how aluminum mirror collect energy outdoors, with results from the experiments not too far off, with expectations they'll be released in the second quarter.

Over the long haul. Alcoa is participating in the experiment because they think aluminium will last longer and be more cost-effective if it collects energy efficiently.

United States Natural Gas Fund (NYSEArca:UNG) Down on Oil Prices Spiking

United States Natural Gas Down

Increasing oil prices has put some downward pressure on natural gas, and United States Natural Gas (NYSEArca:UNG) has responded in kind, dropping along with the move - at least for now.

Others have been heartened by the proposal by Obama to switch coal-burning power plants to natural gas. There will be a lot of opposition to that, and it's not clear whether that would pass or not.

Even if it did, growth for coal would still continue as producers are targeting emerging and developing markets, where they see most of their growth happening, along with most commodities.

Either way, natural gas will increase in use, and long term, that will be good news for the United States Natural Gas Fund.

Delta Petroleum Corporation (Nasdaq:DPTR) Soars

Delta Petroleum Corporation

Delta Petroleum Corporation (Nasdaq:DPTR) soared as high as 43 percent as they agreed to sell their stake in natural gas fields in Colorado for $400 million.

The stock reached as high as $1.95, the highest price for the stock isnce September.

The announcement today, which is a nonbinding agreement at this time, entails selling 37.5 percent of their interests in the Vega area to Opon International, along with selling 5.7 million newly issued shares for $3.50 each. Warrants to acquire another 13.3 million shares at $2.50 each is also part of the proposed agreement.

Delta will still run the Vega project, taking $225 million of the money raised to develop the area over the next 3 years.

The tight credit market severely limited Delta from getting the needed funds to develop the project, with only $10 million in this quarter and $5 million in the second quarter being offered to them.

Delta Petroleum Corporation

Chevron (NYSE:CVX) LA Refinery Flaring Under Control

Chevron's LA Refinery Should be Back to Full Operations Soon

Problems from their instrument air system resulted in flaring at the LA-region refinery of Chevron (NYSE:CVX), which produces 279,000 barrels a day. It is located in El Segundo, California.

Chevron spokesman Rod Spackman said concerning the flaring that "The issues ... were corrected quickly and we should be back to normal shortly."

News of the incident was released when Chevron had to contact California pollution regulators to report the problem.

Originally the company said the unplanned flaring could continue through Thursday morning.

Exxon Mobil (NYSE:XOM), Marathon Oil (NYSE:MRO) and Shale Gas in Europe

Shale Gas in Europe

Exxon Mobil (NYSE:XOM), Marathon Oil (NYSE: MRO) and Royal Dutch Shell (NYSE: RDS-A) are spreading throughout the European landscape in search of shale gas which could be the future of European energy needs, or at least a large part of it.

Shale gas has become huge in America, and energy companies are just starting to search Europe for natural gas found in the shale.

To show the potential in Europe, shale gas reserves, or unconventional gas reserves are estimated to stand at about 1,200 trillion cubic feet, about five times the proven reserves in Europe at this time.

Although this is an important bit of information to know for long-term investors in these companies, it will probably take somewhere near a decade to bring the natural gas to the market and generate revenue for the companies and region.

One small detail does remain, and that is the geology still must be proven before this can be a for sure thing. But if results are anywhere near that in America, it should be a great boon.

Shale Gas in Europe

Caterpillar (NYSE:CAT) Moving Excavator Business to U.S.?

Caterpillar moving excavator business from Japan to U.S.?

Reports are Caterpillar (NYSE:CAT) has initiated a study which could possibly lead to transferring their Excavator business from Japan to the United States.

"The study is based on the current analysis of where the global excavator market is heading and how Caterpillar should position itself for continued leadership in the excavator industry," said Gary Stampanato, Caterpillar vice president with responsibility for excavators in a press release.

If the findings of the study make sense for such a move, Caterpillar would be the largest source of excavators serving the North American market.

The good news for Japan is it sounds like win/win situation if it comes about, as they could better serve the needs of the exploding Asia-Pacific markets, and would probably ramp up capacity and employment there as a result of the move - assuming it is decided by Caterpillar that they will go ahead with the transition.

Bank of America (NYSE:BAC) Sued for Almost $100 Million

Bank of America Sued for close to $100 Million over Merrill Lynch Deal Again

A Dutch pension fund has filed a lawsuit against Bank of America (NYSE:BAC) for almost $100 million, saying the company hid the amount of losses Merrill Lynch had suffered when they were taking over Merrill in 2008.

ABP, with over $285 billion under management, claims in the lawsuit they never knew how deep the losses were at Merrill, which could have resulted in the deal being voted against when the merger was being pushed through.

The suit by ABP says billions in losses were kept from the eye of investors, which kept them from the data needed to make an informed decision.

Bonuses at Merrill Lynch were brought up again in this suit, saying the details of the compensation for executives at Merrill were also withheld from them.

BHP Billiton (LON:BLT) Bullish on Finalizing Rio Tinto (LON:RIO) Joint Venture

BHP Billiton Bullish on Rio Tinto Joint Venture

BHP Billiton (LON:BLT) says it's bullish on being able to finalize the joint venture with Rio Tinto (LON:RIO) for the iron ore production business.

Iron ore demand has increased this year, along with the prices, as steel companies battle for access to iron ore to build their products.

Rio would have a larger stake so BHP would pay them about $5.8 billion to level the stakes in the venture.

Concerns the Australian government will increase taxes to an extraordinary 40 percent is weighing on the deal, as well as other miners, who believe it could do a lot harm to the industry and economic growth, which would be stifled by the high taxes.

Other major hurdles include the deal being approved by the European Union, which somewhat opposed the attempt by BHP to acquire Rio Tinto a couple of years ago.

Mark Mobius Acquires 5 Percent Stake in KSL Holdings

Mark Mobius Acquires Malaysian Property Management Company

Mark Mobius' Franklin Templeton Investments acquired a 5 percent stake in KSL Holdings of Malaysia via its Templeton Emerging Markets Group.

"We are impressed with KSL's diversified property projects and business model, and our investment will provide support for the company's continued growth and presence in the fast-growing Malaysian market," Mobius said in a statement Wednesday.

KSL provides management services to their subsidiaries who are in property management, property investment and property development in Malaysia.

No data was released as to what Templeton Emerging Markets Group paid for the stake in KSL Holdings.

New Gold (TSE:NGD) Resumes Operations at Cerro San Pedro Mine

Full Operations Resume at New Gold's Cerro San Pedro Mine

New Gold (TSE:NGD) said it has received approval from a Mexican court to resume full operations at its Cerro San Pedro mine in Mexico.

The mine was partially shut down when concerns over explosives used there had to be litigated.

A federal court made a ruling in 2006 which resulted in the environmental ministry revoking New Gold's permit until the issue was resolved.

Now that full production will resume, New Gold estimates to produce about 95,000 to 105,000 ounces of gold a year, costing about C$390 to C$410 an ounce sold.

Barrick Gold (NYSE:ABX) Approved for Expansion of Cowal Gold Mine

Barrick Gold Approved for Cowal Gold Mine Expansion

Although it has took some time, Barrick Gold (NYSE:ABX) has finally received approval to expand its Cowal Gold Mine, albeit with several conditions attached.

Initially, Barrick has requested to double the size of Cowal Gold Mine and to double the life span as well. That was met with resistance an litigation.

Now that is past them and they are ready to begin their expansion. Some of the conditions of the expansion include buying up three farms close to the mine if the owners make the request. Limiting noise at six other properties owned by Barrick is another condition.

Water sources were important in the decision-making process as well, with the Lacklin River entitlements held by the company under pressure. Consequently, Barrick found other water resources to add to their needs to relieve pressure on the river.

Barrick has commited $58 billion to the project.

Wednesday, March 17, 2010

Commodities: Grains Up on Weather

Grain Prices Up

With weather projected to have a negative impact on spring planting, grains responded by rising in price, with major crops wheat, corn and soybeans all increasing today.

Other factors helping grains jump up were the stock market rising and the dollar weakening again.

In the Midwest, it's expected to be wetter than it normally is, and in southern States like Texas, it's expected to be cooler; bringing doubt as to how the planting season will launch.

Floods are forecast for a number of Midwestern states, including Minnesota, Iowa and North Dakota.

This is all typical of this time of the year, and once acreage is detemined by the USDA, things always settle back down to market forces and usual grain pricing behavior follows.

Grain Prices Up

Treasury Department Selling Citigroup (NYSE:C) Shares

Treasury Free to Sell Citigroup Shares

The Treasury Department can now freely sell the 7.7 billion shares it owns in Citigroup (NYSE:C) after the "lockup" expired on Wednesday.

Now that the shares in Citigroup has skyrocketed over the last several weeks, holding at over $4 a share for now, it would be a good time for the Treasury to sell and realize gains of up to $6.2 billion, depending on how and when they are unloaded.

This would be good for Citigroup as well, as it would probably get another good increase in its share price when the government is no longer a major owner in the business. Shareholders and investors have been waiting for that to happen in order to have a better idea on where the company will go without government interference.

The original investment in city by the government was $25 billion, and today it would be worth over $31 billion if it was sold.

Even with this scenario, it is expected the selling of shares in Citigroup will be in chunks over the next year or so, which as far as return on investment goes, could be good or bad.

Alcoa Inc. (NYSE:AA) Up On Little News

Alcoa Surges in Share Price Today

Aluminum giant Alcoa (NYSE:AA) helped lead the Dow Jones Industrial Average higher today, although little news emerged which gave a reason for the sudden spike in share price.

Also performing strong in the commodity sector was Exxon Mobil (NYSE:XOM), which also helped the Dow move higher. Exxon was easy to read as oil prices continue to go up.

It's possible with Alcoa that they were due for an upward adjustment after having a lot of downward pressure on them. We'll see if this is sustainable in any meaningful way, or just some investors attempting to guess and time the market in light of their recent performance.

Alcoa Surges in Share Price Today

Exxon Mobil (NYSE:XOM) and XTO Energy (NYSE:XTO)

Exxon Mobil Waiting Period over for XTO Energy

A required regulatory hurdle entailing a waiting period for Exxon Mobil (NYSE:XOM) to take over XTO Energy (NYSE:XTO) has been met, and the fact that there were no objections or actions taken by the Federal Trade Commission or the Justice Department implies an open door and that Exxon and XTO can go forward with the deal. The waiting period officially ended on Monday.

Terms of the deal are straightforward, with Exxon acquiring XTO in an all-stock deal for the company. One other key requirement will be for the shareholders to approve the deal, which doesn't seem to be a problem at this time. Exxon will also take over about $10 billion in debt XTO holds. The deal is expected to close on June 30 according to CEO Rex Tillerson.

According to XTO, they are sitting on 45 trillion cubic feet of gas which is trapped in tight shale formations, which formerly was cost-prohibitive to extract. New technology exists where it can be done on a much less expensive basis.

Exxon believes natural gas will be an important generator of electricity in the years ahead.

Alamos Gold (TSE:AGI): Going Big Time?

Alamos Gold is Ready for the Big Time

After a solid fourth-quarter report, Alamos Gold (TSE:AGI) has walked away from it with some swagger, and is looking toward significant expansion going forward.

The company has enjoyed three straight years of increasing their gold production, as their Mulatos Mine in Mexico continues to produce well, projecting between 160,000 to 175,000 ounces to be mined in 2010.

Cost an ounce will be at about $338, making it a very profitable project.

With that effort and a strong war chest of $147 million, including short-term investments and cash, Alamos gold is positioned to grow the company out through acquisitions, while maintaining some solid organic growth.

CEO John McCluskey has thrown aside subtle and let it be known they are hunting for gold properties and companies, and are willing to merge and do things nice, or get aggressive and make hostile bids if that's what it takes to grow the company.

They have two gold projects they acquired from Teck Resources (NYSE:TCK)and Fronteer Development Group (AMEX:FRG) in the early part of 2010, and estimate it'll begin production in the early part of 2013. They bought those for cash.

I like this company because of their strong cash position, organic growth potential, and the desire to grow over the next several years. Most of what I like is the cost controls in place, which show they have good management in place who aren't ready to just throw money around hoping to land a deal which could easily bankrupt or weaken the company.

That means they've worked hard to position themselves to take advantage of a number of opportunities in the near future, or to make their own opportunities. If they keep their heads and operational discipline, this could be a very nice gold company to invest in and hold.

Alamos Gold is Ready for the Big Time